Pricing Your Home to Sell
"It's a mistake to believe that you will get more for a property by asking for more."
Q. How do I know if my home is priced correctly?
A. The Milam Group will do everything we can to sell your home quickly, at the highest price the market will bear, and with the least amount of inconvenience. But the one thing we cannot control is the market. Even though we may both agree how valuable your home is, the value of your home from a selling standpoint will be determined solely by the buyer. Therefore, it is critical to understand the market trends in your area. Sometimes the market will fluctuate in the selling period, and these fluctuations must be monitored to make sure your home is neither overpriced nor under priced. Donnel will communicate with you throughout your selling period about current market conditions, so you can make the decisions necessary to realize your real estate goals as quickly as possible.
Q. Another agent thinks my home is worth more. Shouldn't I use the one who will list my home at the highest price?
A. You should list with the agent who will sell your home at the highest price the market will bear, not the one who will list your home at the highest price. Agents who agreed to overprice your home are not doing you any favors. The fact is that by the time an overpriced property is reduced to market value, it has been on the market too long for buyers to offer full price. When your property is priced correctly to begin with, you have the best opportunity to get the highest price and multiple offers. Choose the agent who understands the market and who has the best tools and services to get your home sold to meet your goals.
Q. How do we know if our home is overpriced?
A. When pricing your home, look at similar sized homes that have sold in your area in the past 3 months. These homes have been "market tested." (Homes that are currently active on the market are only "testing the market"--not proven.) Homes that are overpriced sit on the market for much longer periods of time. If your home is not seeing any showings or offers in the first 30 days, this means that the agents and potential buyers are not interested because they believe they can buy more for their dollar elsewhere.
Q. Can't we just try it at a higher price for a while? We can always come down.
A. Buyers are looking for the best value for their $$. If the home is priced right up front, they will try to "lock in" quickly before another buyer comes along. If however, the home is overpriced, several things will happen: 1) in a falling market, price reductions may never catch the market; 2) buyers search in their price range--overpricing will eliminate potential buyers; 3) buyers view price reductions as a vulnerable spot, and they will often lowball their offers.
Q. How many homes does the average buyer look at before choosing a home?
A. According to the National Association of Realtor's 2007 Profile of Buyers and Sellers, the average buyers will physically look at 12 homes before making an offer. This means that buyers are comparing your home not only to similar homes in your neighborhood, but to similar homes in a broader area. It's also important to know that buyers are shopping for homes differently today than they were even 5 years ago. Today, 85% of all buyers "qualify" homes they want to see on-line. That's why a strong and aggressive on-line presence is so important.
Impact of Overpricing
Sends buyers to other properties
Helps the competition sell their home
Reduces advertising response
Attracts the wrong prospects
Encourages low-ball offers
Eliminates serious and negotiable offers
Can create appraisal problems
Extends market time
